To promote usage of solar power, the National Bank for Agriculture and Rural Development (NABARD) is to release subsidy ‘upfront' against the credit sanctioned by banks for installation of lightning and water heating systems.
As an encouragement to banks, the NABARD will also be refinancing entire outstanding (excluding the capital subsidy). The scheme, conceptualised by Union Ministry of New and Renewable Energy and implemented through NABARD, is going to be highly beneficial for people who are encountering erratic power supply.
NABARD Assistant General Manager V. Sriram has said that the subsidy would be 30 per cent of the total cost of the solar off-grid (both photo voltaic and thermal) and decentralised application gadgets. Under this subsidy-cum-refinance model scheme, the banks, after giving in-principle sanction of the loan for the project, should approach NABARD for upfront release of capital subsidy which, in turn, would be credited to the subsidy reserve fund of the borrower.
“On receipt of subsidy from NABARD, the banks can release the loan amount,” Mr. Sriram said.
He added that loans to be given for pre-approved models of solar energy lighting and water heating would be attracting very low interests. The loan repayment would have a minimum lock in period of three years from the date of disbursement of the first instalment of the loan.